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After a spirited debate this afternoon, the Ohio House passed a bill that would cut the fees
payday lenders can charge for short-term loans.

With most Democrats joining more than a handful of Republicans, the House voted 61-37 to
prohibit payday lenders from issuing checks and then charging customers to cash them, and would
limit origination and credit-check fees on loans $1,000 or less to once every 90 days.

The measure now moves to the Ohio Senate for consideration.

House Speaker Armond Budish, D-Beachwood, supported the bill. Gov. Ted Strickland also has
called it priority legislation. Lawmakers passed and voters overwhelmingly affirmed a law in 2008
limiting interest rates on payday loans to 28 percent, but lenders have avoided the limit by
changing lending licenses.

"This is a consumer protection issue and should not be a political issue," said Rep. Matt Lundy,
D-Elyria, the bill sponsor. "The people of Ohio have sent us a crystal clear message."

Rep. Sandra Williams, D-Cleveland, countered that some people don't have access to traditional
credit and "some of us know our districts better than others. Contrary to popular belief, not
everybody hates payday lending."

The payday industry lobbied hard against the measure, which store owners said would put them out
of business, denying credit to people with nowhere else to turn. Payday opponents argue that the
loans, which often must be paid back in two weeks, are inherently defective because they force too
many borrowers into a cycle of debt, where they must repeatedly take out new loans to pay off old
ones.

"This bill is highly discriminatory not necessarily based on race, gender or age," said Rep.
Bill Coley, R-West Chester. "It's discrimination against those of limited means."

Coley said payday lenders are doing what lawmakers told them to do when they argued that the
2008 measure would shut them all down.

"You've got the cart way before the horse," he said, telling supporters they were being pious by
trying to protect people from themselves. "Let's find an alternative where people can borrow money
from before we axe their only line of credit."

But Rep. Dan Stewart, D-Columbus, said if payday lenders cannot make it with a 28 percent annual
interest rate, "maybe it's not a good business model."

"This is not a solution to people's problems who are having hard economic times," he said. "This
is the crack cocaine of financial institutions. You don't help them by perpetuating the
problem."

Rep. Alicia Reece, D-Cincinnati, said she would support the bill but hoped that lawmakers will
move to the next phase, which is opening up credit opportunities to more Ohioans.

"I talked to people in my district who said they had nowhere else to turn," she said. "But I
also heard that just because I don't have access to credit, I should not be gouged."

Coley tried to have the bill referred back to committee, where he caused a ruckus a few weeks
ago when he unsuccessfully tried to use a procedural maneuver to scuttle the bill.

He said the referral would give time to see if a bipartisan alternative is successful. The
motion failed 63-35.

"We're going to lose another 3,000 jobs at a time when, can we really afford to lose those
jobs?" said Rep. Robert Hackett, R-London. "We're going to run an industry out of Ohio. We need an
avenue of credit."

Rep. Clayton Luckie, D-Dayton, has been working with Hackett on an alternative proposal that
would allow small 90-day loans.